Washington Electric Co-op, based in East Montpelier, was the first utility in Vermont to reach and exceed Vermont’s 4 percent statutory cap on net metering capacity. In fact, WEC hit 6 percent. While the member-owned utility has been a leader on progressive energy issues in the state for decades, it has been forced into a corner when it comes to net metering.
Other smaller utilities, including Hardwick Electric Co., that also have met the cap simply have done away with net metering to avoid the business quandary now facing WEC.
WEC’s board voted to limit the size of net metering installations after Oct. 1, to no more than 5 kilowatts, pending consideration of changes to the net metering program during the upcoming legislative session.
The utility maintained that while continuing to be committed to progressive environmental energy policy, it must also balance its fiduciary and regulatory responsibility to its member-owners to collect revenues in a fair and equitable manner and to maintain its distribution and transmission system.
According to the Public Service Department website, net metering “makes it easier and more cost-effective for Vermonters to generate their own electricity.” In 1997 the Legislature allowed net metering, which requires electric utilities to permit an individual customer or group of individual customers to generate their own power using small-scale renewable energy systems and qualified combined heat and power systems using nonrenewable fuels. The excess power they generate can be fed back to their utilities.
Before net metering, self-generators had to install expensive battery banks to store the power they needed or go through lengthy negotiations with their utilities to have them buy any extra power generated. In its simplest form, “a net metering system will generate power that will flow to the owner’s load, and if there is more power than demand, through the customer’s electric meter. The meter will measure electricity flowing in both directions, unifying a customer’s power usage and generation.”
WEC and other electric utilities in Vermont supported the current net metering legislation passed in 2011 that set the maximum obligation, or cap, of 4 percent of each utility’s peak load for net metering installations.
That’s causing hardship and a gap in the utilities’ budgets.
“As a cooperative we do not make money providing and selling power. Most folks are not aware that two-thirds of WEC’s 21 cent cost per (kilowatt-hour) goes to maintaining the most rural service territory in the state,” WEC board President Barry Bernstein said in a statement. “We need to collect revenue to pay for costs for poles, wires, transmission/distribution, storm restoration, and business operations. Any excess dollars we collect are returned to members. If we are short dollars we must raise rates. Net metering members do not contribute the full cost of using WEC wires and poles, thus we must collect it from other members.”
That cost shift is too great a burden. All utility customers need to benefit equitably.
There are answers out there, including imposing fees on customers using net metering, or creating a new standard offer that utilities offering net metering would pay into and be repaid on a more equitable basis. But as is the case with any utility, the debate is overcharged and mired in politics and self-interest.
This next legislative session, lawmakers are going to get hit from all sides — from the electric companies, from the lobbyists and from Vermonters who just want to “go green” and install solar, wind or other renewables in order to do their part.
The issue cannot be ignored, especially now that Vermont Yankee’s potential portion of any equation for the state’s energy future shifts dramatically.
Renewables work in Vermont. Utilities are willing to do their part in making that happen for customers. It is up to the Legislature and its partners in the net metering discussion to keep our energy future strong. Our success should not be allowed to dim.
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